Middle East carriers in a growth spurt

A recent flurry of orders for large planes by three carriers in the region has their counterparts in the US and Europe complaining about unfair trade advantages and competition

By Jad Mouawad / NY Times News Service, NEW YORK

An Airbus A380 owned by Emirates airline and al-Fursan, the aerobatics demonstration team of the United Arab Emirates Air Force, perform during the Dubai Airshow on Nov. 18 at the Dubai World Central in Jebel Ali, United Arab Emirates.

Photo: EPA

There is little doubting the ambitions of the giant Middle Eastern airlines, but recent large plane orders demonstrated just how aggressively these carriers plan to compete in coming years.

The three airlines — Emirates, Etihad Airlines and Qatar Airways — all based in the same corner of the Persian Gulf, already operate more wide-body airplanes than all the US carriers put together. However, last week, at the Dubai Air Show, they announced plans to buy 350 more long-range planes from Boeing and Airbus, with orders valued at a record US$162 billion and deliveries extending well into the next decade.

Emirates alone ordered 150 of the new Boeing 777X jets, with an option for 50 more, as well as an additional 50 Airbus A380s, the biggest passenger jet. It was billed as “the largest ever aircraft order in civil aviation,” a commitment worth US$99 billion at list prices.

The size of these orders stunned aviation watchers. It provided a sense of the scale the airlines are after and dwarfs anything US carriers have planned. American Airlines, for instance, ordered 600 planes for the next decade to replace its aging fleet, but the bulk of those are single-aisle planes for the domestic market, not twin-aisle ocean-crossing giants.

Emirates, established in 1985 with one jet plane, has been the main driver of this growth, putting Dubai, United Arab Emirates, on the map as one the world’s biggest air travel hubs. The airline, which carried 39 million passengers last year, aims for 70 million annual passengers by 2020, chief executive Tim Clark said. This would make Emirates the biggest airline by international passengers, he said in a speech last month.

Their strategy is simple, said Richard Aboulafia, an aviation analyst at the Teal Group in Fairfax, Virginia.

“They want to take over the world,” he said.

Emirates has thrived by building routes to developing countries long neglected by traditional carriers and by providing an alternative to local airlines — connecting Europe and India, Africa and Russia, China and the Middle East. Instead of flying through traditional hubs like London or Frankfurt, Germany, these new routes run through Dubai, which the airline has turned into a hub thanks to the backing of the city’s ruling family.

DUBAI MODEL

The success of the Dubai model has ignited the envy of its neighbors, whcih have sought to copy it with their own global airlines. At the air show, Qatar’s flag carrier, Qatar Airways, said it would buy 50 Boeing 777X jets — a new aircraft that should be available by 2020. Etihad, based in neighboring Abu Dhabi and the smallest of the three, ordered 143 airplanes at the show, including 30 Boeing 787s and 50 Airbus A350s.

Their ambitions have sent ripples of concerns among their competitors, more recently in the US, where the biggest pilots’ union, the Air Line Pilots Association, called these airlines an “economic threat” to US carriers and their employees. The industry’s trade group, Airlines for America, said US airlines cannot compete fairly against rivals that benefit from government subsidies.

“I can understand the frustration felt by the legacy carriers whose lunch is being eaten,” Aboulafia said, referring to Delta Air Lines, United Airlines and what will be a combined American Airlines and US Airways. “The best-case scenario for them is that all the growth goes through the Gulf and everyone else makes do with a stagnant market.”